Instacart shoppers may be paying different prices for the same grocery items, according to a months-long investigation by Consumer Reports and the Groundwork Collaborative, which found price differences of up to 23% between customers.
The nonprofit groups reported that identical items sold through Instacart varied in price from one shopper to another because of algorithmic pricing experiments. The AI-driven pricing system, which Instacart began rolling out in 2022, sets prices for some large retail partners without clearly disclosing the differences to customers, the report said.
Pricing discrepancies are especially difficult for shoppers to detect online, said Neil Saunders, managing director and analyst at GlobalData.
“You sit in front of your phone or your browser, you’re shown the price, and you don’t know what everyone else was shown,” Saunders said.
Justin Brookman, Director of Digital Marketplace Policy for Consumer Reports, echoed that concern. “Traditionally, we haven’t had to worry about this sort of thing. We would go to the supermarket and pay what was on the shelf,” he told CBS News. “Now, I think people are going to be worried: Am I getting ripped off?”
Report finds major price discrepancies
Consumer Reports and Groundwork Collaborative based their findings on online shopping sessions in which hundreds of volunteers purchased identical baskets of goods on Instacart from Safeway and Target. All 437 participants were exposed to algorithmic price experiments, according to the report, which also found evidence of similar practices at Albertsons, Costco, Kroger and Sprouts Farmers Market.
The organizations said Instacart has characterized the price differences as “negligible,” but argued that the experiments are “far broader and more costly to some consumers than has been publicly acknowledged.”
Some products were listed at as many as five different prices, with differences ranging from 7 cents to $2.56 per item. In one Seattle Safeway test, the price of a box of Wheat Thins varied by as much as 23%. Based on typical grocery spending for a household of four, the report estimated that the price variations could add up to $1,200 a year.
Not all items were affected. At the same Seattle Safeway, volunteers saw no price differences for products such as Premium saltine crackers, Heinz ketchup and Barilla farfalle pasta. Safeway did not immediately respond to a request for comment.
Instacart told CBS News that 10 retail partners are currently using pricing experiments but did not identify them.
“Just as retailers have long tested prices in their physical stores to better understand consumer preferences, a subset of only 10 retail partners — ones that already apply markups — do the same online via Instacart,” a spokesperson said in an email. “These limited, short-term and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable.”
The report also found that some shoppers were shown different “original” prices, making discounts appear larger — a practice known as “fictitious pricing.” Amazon was sued in October over similar allegations tied to its Prime Day sale.
The rise of AI pricing models
Dynamic pricing has long been used in e-commerce, particularly in industries like travel, where supply is fixed. But Saunders said consumers may be less accepting of such practices in grocery retail.
“In retail, especially grocery retail, people expect the price to be the price,” he said. “They don’t expect [it] to yo-yo up and down.”
The report also noted that shoppers are often unaware they are part of pricing experiments. While the Federal Trade Commission Act prohibits “unfair or deceptive acts or practices,” including misleading price claims, Saunders said companies are not necessarily required to disclose that customers are being shown experimental prices.
“Instacart shoppers we spoke to say they were unaware that they were participants in active Instacart pricing experiments and view the practice as manipulative and unfair,” the report said.
One form of dynamic pricing is surveillance pricing, which uses consumer behavior and personal data to set prices. Saunders said artificial intelligence has accelerated the practice by enabling companies to analyze vast amounts of data quickly.
Instacart told CBS News that it does not use personal, demographic or user-level behavioral data to determine prices. Still, Brookman said he remains concerned about what increasingly sophisticated pricing models could mean for consumers.
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